India's growth platform struggles to boost tech innovation

India faces a challenge in advancing its economy from middle-income to high-income status, according to a recent World Bank report. The report warns that stagnant productivity and limited innovation could hinder this progress. To address these issues, India launched the Innovators Growth Platform (IGP) in 2019. The IGP aims to support new-age technology companies in sectors like information technology and biotechnology. It offers relaxed compliance norms and easier access to public capital. However, despite these efforts, the platform has not achieved the success seen in similar initiatives in China and Hong Kong. One major obstacle for the IGP is the perception that it is smaller and less valuable than the main board of the stock market. Many prominent startups, including Zomato and Paytm, prefer listing on the main board. Additionally, the minimum investment requirement of 2 lakh rupees discourages retail investors, leading to lower trading volumes. The IGP does offer some advantages, such as allowing founders to keep control of their companies. However, it lacks flexibility compared to other successful markets. Venture capitalists often seek more rights and protections when investing, which the IGP does not provide adequately. The regulatory environment in Hong Kong is more dynamic, frequently updating rules to attract high-growth companies. India’s IGP could benefit from similar reforms. Encouraging domestic institutional participation and raising awareness of the platform are potential solutions for boosting investor confidence. To truly thrive, India needs to invest in innovative technologies and simplify its regulatory frameworks. By doing so, the IGP could become a more prominent player in the global capital market, helping to grow the economy and create valuable jobs in emerging sectors.